Washington, May 2: India and the US are to scale down the scope of their ambitious nuclear deal unveiled amid great fanfare in July 2005 and later set out in greater detail in March last year.

This became inevitable after negotiators of the two countries failed to bridge irreconcilable differences during talks here on Monday.

India’s foreign secretary Shiv Shankar Menon and the US undersecretary of state for political affairs, Nicholas Burns, met at the state department yesterday for two and a half hours to exclusively discuss the nuclear deal.

Both sides agreed that in view of the yawning gap in the position of their negotiators, the only option was to have a 123 pact that was solely built around areas of mutual agreement.

Therefore, an Indo-US 123 agreement — so called because it is needed to operationalise the nuclear deal under Section 123 of the US Atomic Energy Act — is expected to be finalised later this month.

It will omit all areas of disagreement between New Delhi and Washington, but it will also mean that the nuclear deal will be proportionately cut to size to accommodate only those elements that are set out in the agreed text of the 123 pact.

Before agreeing on this innovative course of action yesterday, Menon and Burns met for dinner on Monday night at the historic Watergate Hotel and reviewed the outcome of daylong talks between their negotiators, which failed to produce any new areas of convergence.

The negotiators had earlier met for four days in Cape Town about a fortnight ago and for two days in Delhi in March. These meetings produced unexpectedly large agreement on the text of a 123 pact.

Menon and Burns came to the logical conclusion yesterday that further negotiations were unlikely to see any agreement quickly on the remaining sticking points and that neither the nuclear deal nor the broad agenda of Indo-US relations should be held hostage to those disagreements.

Luckily for Prime Minister Manmohan Singh and President George W. Bush, there is no rigidity about what a 123 agreement between the US and any of its nuclear partners should be. Their governments will, therefore, tout the agreement that is expected to be finalised after Burns visits New Delhi in the second half of May as a sign of progress towards implementing the nuclear deal.

Such a spin will overlook the reality that the agreed 123 text is what is possible at this stage rather than what the two countries would have liked to have agreed upon when the nuclear deal was conceived in 2005.

Although public pronouncements by both India and the US yesterday on the nuclear deal were measured and circumspect, there was enough on record that confirmed background briefings by officials on the new strategy that is now expected to take the deal forward.

State department spokesperson Sean McCormack said “it is going to require some creativity and some compromise on both sides in order to get an agreement done if we are going to be able to move this as quickly as we would have hoped”.

In a separate statement, the state department announced that Burns would visit India in the second half of May “to reach a final agreement”.

At a news conference at the Indian embassy here, Menon did not go that far. “We have made considerable progress” that a 123 agreement is “doable”, he said.

But unlike Burns, the foreign secretary did not put a date for finalising the pact. “We hope to finalise it as soon as we can,” he said.

The Bush administration is widely believed to be under intense pressure from US companies like Westinghouse to complete the deal so that they can quickly compete with the French who already have one foot in India’s nuclear market and the Russians, who are well-entrenched.